Expert reports

• The Role of SMEs and Entrepreneurship in a Globalised Economy

  Expert report 34

• What does globalisation mean for small and medium-sized firms, SMEs, innovation and entrepreneurship? One conclusion is that virtually every type of firm could participate on a global market. One reason being the new technology which means that even very small local firms have new possibilities. On the other hand, this also means increased competition. Summing up there are new opportunities as well as new challenges and threats for all companies acting in a globalised world. In "The Role of SMEs and Entrepreneurship in a Globalised Economy" a number of international and national researchers in the field of innovation, entrepreneurship and SMEs give their views on what globalisation mean from different perspectives. Five chapters are mainly describing and analyzing the implications of globalisation from a developed country perspective while the remaining three chapters involve developing countries.

• Environmental Effects of International Trade

  Expert report 31

• No aspect of globalization worries the critics more than its implications for the environment. It is widely accepted that the direct effects of globalisation on the economy are positive, promoting international specialization, trade and growth. Concerns rise more with regard to "non-economic" effects of globalisation, i.e. negative externalities in the form of pollution and environmental degradation, due to the free rider problem. The report "Environmental Effects of International Trade" surveys the state of our knowledge in this field and presents new and updated evidence regarding the effects of trade on the environment. A central question is whether globalisation helps or hurts in achieving the best trade-off between environmental and economic goals. Generally empirical studies of cross-country data find no or limited detrimental effects of trade on the environment, or that such effects are limited in time as countries grow out of poverty. However, there seems to one exception: carbon dioxide emissions. Hence, the evidence does suggest that trade and growth can exacerbate carbon dioxide emissions for countries, controlling for their income levels. The author provides specific recommendations that should be addressed at the coming Kyoto II meeting 2009 in Copenhagen. In particular, the meeting should come to an agreement on a multilateral framework for trade measures, rather than leaving it up to individual states without guidelines.

• Clusters, Cluster Policy, and Swedish Competitiveness in the Global Economy

  Expert report 30

• Proximity enables firms to take advantage of knowledge spill-overs and exploit supplierdemand linkages with other entities engaged in related activities. Cluster strength thus seems to be one of the important determinants of prosperity differences across geographies. How can cluster-based economic policy help Sweden succeed in global competition? The report "Clusters, Cluster Policy, and Swedish Competitiveness in the Global Economy" approaches this central question through three different steps. First, what can be learnt from the academic research on clusters so far? Second, what conclusions can be drawn from the debate about whether cluster policy is at all useful, and how can it be structured to achieve the best possible impact? Third, what does this mean in terms of implementing a cluster policy for Sweden? The author outlines specific recommendations on how policy should be designed to improve cluster dynamics, how the fundamentals can be changed to make the emergence of strong clusters more likely, and the extent to which cluster processes can be a channel back into overall competitiveness policies at the regional and national level.

• Economic Globalization and Swedish Pensions

  Expert report 28

• Historically pension systems have undergone repeated changes as the economy and demography have changed, as politics has changed, and as understanding of the workings and effects of pension systems has evolved. Looking to the future, it is appropriate to ask how ongoing increasing economic globalization might affect the workings of the pension system and what changes might be worthwhile in the light of the anticipated changes. In the report Economic Globalization and Swedish Pensions the effects of globalization on the functioning of the Swedish pension system are analyzed. The author emphasizes that the Swedish pension system by and large is well designed. Nevertheless, there is room for improvement to better handle the effects of globalization and a number of concrete reforms are proposed.

• Live and let die - industrial policy in a globalised world

  Expert report 22

• It is often claimed that industrial policies are an essential ingredient in policy-making for any country that aims at sustaining and increasing a competitive industrial sector. But does a small, open European economy actually need an industrial policy? Judging from this report, the answer seems to be in the affirmative. However, today's globalised world requires a different design where industrial policies are realigned with comparative advantage of a country, promote regional agglomerations and enhance industrial efficiency. Attempts to ensure regional equity by means of industrial policy is likely to have detrimental effects on productivity and growth. In the report, Live and let die - industrial policy in a globalised world, the challenges facing industrial policy makers in the 21st century are analyzed and policy conclusions drawn. The author emphasizes two major challenges that face policy makers: First, to give well-targeted measures the correct design. Second, to observe that efficient industrial policy is often about not doing anything.

• On the Road to Samarkand. Globalisation and the Swedish economy

  Expert report 21

• Globalisation will have dramatic effects on the Swedish economy - and by and large, positive ones. The entry of China and India into the world economy has already benefited Swedish consumers and will continue to do so on an even larger scale in the decades ahead. The total gain to the Swedish economy is calculated to be in the range of 25 per cent of GDP. However globalisation also poses real challenges regarding the adaptability of the Swedish economy to cope with structural change, a less egalitarian income distribution and more concentrated geographical distribution of economic activity.

• In the report, On the Road to Samarkand - Globalisation and the Swedish economy, the objective is to quantify the effects of globalisation on world markets and analyse the ensuing implications for the Swedish economy within a fifty-year time horizon. The authors focus on three channels of globalisation - the integration of China and India into the world economy, the internationalisation of firms and growth in cross-border business investment, and the migration of workers between Eastern and Western Europe.

• Is free migration compatible with a European-style welfare state?

  Expert report 11

• This report suggests ways of reconciling free migration with a generous welfare state. Taking Sweden as the point of departure, the author analyses to what extent rich-country welfare states act as magnets for migrants from poorer countries as well as the net impact of immigration on public finances. The claim that greater diversity reduces political support for the welfare state is challenged, while the broader economic impact of free migration is emphasized. The author argues that free migration may pose challenges to a European-style welfare state but that the two are far from incompatible. Rather, by boosting economic growth, free migration could actually make the welfare state more affordable.